European stocks drifted lower on Monday as markets reacted to President Donald Trump’s unexpected plan to impose a 30% tariff on EU goods. The Stoxx 50 dipped 0.25%, while the broader Stoxx 600 fell by 1.20%, reflecting wider concerns over the regional economic outlook. Major investment banks warned of potential fallout. Goldman Sachs and Barclays said the tariffs could hinder growth and may force the European Central Bank to cut rates. JPMorgan noted that a smaller 10% tariff had been expected, making the announcement a significant surprise. In response, the EU is preparing €72 billion in countermeasures. Trade Commissioner Maroš Šefčovič said all options remain on the table as talks with US officials continue. 

The auto sector was hit hardest, with Volkswagen, BMW and Mercedes falling up to 2.50%, while Volvo plunged 5% after warning of profitability risks linked to tariffs on electric vehicles. In contrast, the FTSE 100 rose over 0.50%, nearing the 9000 mark, boosted by strong performances in pharmaceuticals and safe-haven assets. Shell and BP declined more than 1% as crude prices weakened amid fears of slowing global demand.

The major US stock indices closed modestly higher amid ongoing trade tensions and in anticipation of key economic data. The S&P 500 rose by 0.12% closing at 6 267.30, while the Dow Jones Industrial Average gained 0.08% to finish near 44 407.01. The Nasdaq Composite also advanced, with gains at 0.35%, closing at 20 656.81. Investor sentiment remains cautiously optimistic as markets prepare for the Consumer Price Index (CPI) report, which is expected to highlight rising inflationary pressures as companies begin passing on higher import costs. Meanwhile, the yield on the US 10-year Treasury note climbed to 4.44%, its highest level in nearly a month, as bond markets absorbed pressures from escalating trade concerns and awaited inflation data.

Sector performance was mixed. Health and energy sectors lagged, while communication services showed resilience. Among major technology firms, Nvidia, Microsoft, Apple, and Broadcom saw slight declines between 0.30% and 0.70%, whereas Meta and Alphabet posted modest gains of around 0.40% and 0.80%, respectively. 

In Asian markets, Japan’s Nikkei 225 dipped 0.28% to finish at 39 459.62, weighed down by concerns over the potential impact of escalating trade disputes on global growth. In contrast, the Shanghai Composite rose 0.33% to 3 521.80. The Hang Seng Index in Hong Kong also gained, climbing 0.39% to close at 24 233.49, supported by the positive sentiment from China’s trade data and a rebound in Chinese technology stocks. Overall, Asian markets displayed a varied performance, with Chinese and Hong Kong equities showing resilience while Japanese stocks edged lower.

South African markets closed lower on Monday, with the JSE All-Share Index down 0.43% at 96 799.66 and the Top 40 slipping 0.40% to 89 047.54. Sector performance was mixed. The Resources 10 index led gains, rising 0.50%, while the Financial and Industrial indices declined by 0.38% and 0.93%, respectively. The rand firmed slightly, strengthening by 0.15% to trade at 17.91 against the US dollar and 20.89 against the euro.

Global commodity markets came under pressure amid growing concerns about weakening demand, fuelled by escalating trade tensions. WTI crude oil futures fell 1.50% to below $67.60 per barrel after President Trump stopped short of announcing new sanctions on Russian oil – disappointing markets that had expected more forceful action. While he warned of potential 100% secondary tariffs on Russia if a ceasefire is not achieved within 50 days, the lack of immediate measures weighed on sentiment.

In contrast, precious metals benefited from the uncertain outlook. Gold rose by 1.27% to $3 347.73 per ounce, while silver inched up by 0.21%.